$20 for 768Kbps Internet? AT&T “deal” shows sad state of US broadband

And did I mention the fees?

For many years, I was an AT&T DSL customer with a "top of the line" 6Mbps connection. Eventually, the company's inability to offer faster speeds in the Chicago area drove me into the waiting arms of Comcast, which was substantially more expensive but had the great virtue of at least offering speeds of 20+ Mbps.

Now, AT&T wants me back. Having finally brought its fiber-to-the-local-node U-Verse system to my town, AT&T sent me a letter this week offering "great low prices" and "a whole lot more." The low price turned out to be $19.95 a month. The "whole lot more" turned out to be:

A one-year term commitment

Up to $180 in early termination fees

$99 installation charge

$6/month fee to rent a DSL modem/router, should I need one

"Up to 768k" connection speeds

Yes, you read that last point right. This incredible deal package provides Internet so slow that it is still measured in kilobits per second. (The upside? No real worries about burning through your 250GB/month data limit.)

Adding insult to this already significant injury, $19.95 is only the promotional price. After a year, the "standard rate applies unless canceled by customer." The letter doesn't bother to explain what the "standard rate" actually is.

Visiting AT&T's U-Verse website is, if anything, more amazing than reading this letter. The website says that, for my home, AT&T would prefer to bill me a shocking $28/month for 768kbps Internet, making the $19.95 a "discount" if certainly not a "deal." Of course, it's all a ploy. The real plan is to use the lowest possible price to get you to investigate U-Verse and then sign up for a higher priced tier. How else can you explain the fact that U-Verse offers me almost 25x the speed for twice the price (18Mbps for $56/month)?

AT&T's U-Verse speeds and prices in my area.

AT&T

In a nutshell, the AT&T offer represents everything that's too often wrong with American broadband: high prices, modest speeds, extra fees, and time commitments (I know first hand Comcast has many of the same issues). To see what's truly possible, compare these abysmal speeds and prices to those available from three different providers who are building new fiber networks to avoid incumbents:

768kbps is so slow that Google and the City of Seattle both offer (much faster) 5Mbps connections for free. Chattanooga doesn't even offer service under 50Mbps. But apparently, in my town, this is still "high speed Internet."

Update: A reader points out that Google Fiber's free tier requires a one-time $300 fee to bring the fiber drop to your house, so it's not completely free (though the fee doesn't appear to be charged to any future users of the service at that location).

What's worse is if you look at the upload speeds, you don't reach over 1 Mbps until you're into their post-$50 deals. People are all excited about the possibility of streaming video games directly from their XBone/PS4 on Twitch, but with upload speeds like that you'll be lucky to see anything other than a pixelated disaster.

Local monopolies create some of this mess. I can get 300MB FiOS at my house, but go to the neighboring city and you are stuck with >6MB DSL. Allowing the providers to carve out monopoly zones is hurting us all. The government is hurting us here. Rural service is another issue, which the gov can actually solve.

You can't say this is for lack of competition though, right? You mentioned Comcast is there. Are they much better price-wise in Chicago than AT&T? Because, you know, even if 768kbps cost just $10 a month, I'm still not sure it would be a good deal...

It's pretty clear that if AT&T, Verizon or any other traditional DSL provider wants to remain relevant as a home ISP, they're going to need to start laying out FTTH. Or maybe the future will just rely on wireless for home Internet (with data caps, I seriously doubt that).

I believe it's factually incorrect that Google offers 5mbit for free, as I understand you have to pay a fee to have that installed. Divide that fee with the number of months you'll use it, you get the point.

While that is pathetic of AT&T, I think people will simply avoid its lowest package. IMO they should have offered 1.5mbit as their lowest package and put that at the $20/mo price point. Their faster packages aren't priced as badly at least. As long as your local government didn't sign away your access to other providers you should have some other choices besides AT&T.

The government is hurting us here. Rural service is another issue, which the gov can actually solve.

'Rural service is another issue, which the gov can actually solve.' Whereas enough states and counties are already in the pocket of telcos and cablecos that they will actually try to ban municipalities from doing anything about it themselves!

Sometimes I read kbps as kiloBYTES per second, not kilotBITS per second, which is a huge difference. This confuses me on occasion, so I would think the average consumer would get confused (or worse mislead) about how fast this really is.

Divide that fee with the number of months you'll use it, you get the point. Google 5mbit costs a 300USD contruction fee. It's dishonest to call that free.

Eh, maybe... the service itself is free, but like all Internet service, you can't use it without the right hardware. $300 is a lot of money, but maybe not so much when you consider that they're laying fiber-optic cable into your house. $300 divided by an infinite number of months is $0, and if you move into a house that already has the installation you probably don't have to pay the fee.

So yes, it's not free as in "you never have to pay any money ever," but then pretty much nothing is. The service, the processing of your data requests, etc., is provided without charge.

The combination of 1-yr term/ETFs, PLUS an installation fee, PLUS an extra fee for renting the modem, is absolutely unconscionable. Those should be mutually exclusive, and I'm sure AT&T can't justify them.

The speeds don't bother me too much, though. Yeah, they're a bit over-priced, and it's a bit underhanded advertising your lowest service, knowing it'll be unacceptable for most, but $20/mo DSL is a lot better than many people get.

Compare to Verizon's FIOS, where their 3/1Mbps package is $65/mo (a TWO-year contract will save you $5). And if you're in a FIOS area, Verizon won't offer DSL, even though the lines are already there. I see right now Verizon has some rebate, so you can get 15/5Mb for less, but that wasn't available when I was shopping for internet service, and they can drop those promos at any time.

I had AT&T at a previous apartment, and it is pretty bad. I've been pretty happy with my Comcast service (didn't think I'd say that before hand). I only say that because I grew up in rural Iowa with dialup then HughesNet. People with any type of cable should count their blessings that they don't have service from that awful internet provider.

I too switched from AT&T DSL to Comcast in the Chicago area. I was especially pissed when AT&T promised 6K DSL, but all I could get most of the time was 3 or under. I still wish I had a choice other than Comcast. I was required to have a basic cable subscription in order to get their "deal", and I don't want their cable TV.

AT&T ripped up the front of my house to install fiber to the local high school, but there is no sign of fiber-based internet available in my neighborhood any time soon.

The US needs an internet equivalent of the "Rural Electrification Act" in the 1930s. Otherwise, we will be left behind by countries that have gov't mandates on network neutrality and internet connectivity.

I believe it's factually incorrect that Google offers 5mbit for free, as I understand you have to pay a fee to have that installed. Divide that fee with the number of months you'll use it, you get the point.

Divide that fee with the number of months you'll use it, you get the point. Google 5mbit costs a 300USD contruction fee. It's dishonest to call that free.

Eh, maybe... the service itself is free, but like all Internet service, you can't use it without the right hardware. $300 is a lot of money, but maybe not so much when you consider that they're laying fiber-optic cable into your house. $300 divided by an infinite number of months is $0, and if you move into a house that already has the installation you probably don't have to pay the fee.

So yes, it's not free as in "you never have to pay any money ever," but then pretty much nothing is. The service, the processing of your data requests, etc., is provided without charge.

IIRC it's 7 years of 5mbit for no monthly fee. That works out to $1.79/month. If you're not the first person owning the domicile it's going into then you don't get hit with any of that cost.

This pretty much highlights the problems of our monopoly/duopoly. High prices, poor service, over-subscription, mandatory fees, and hidden prices after the promotional period ends. A few locales and providers break the mold, but most do not have access to such providers.

The FCC seems overly focused on bringing broadband to rural areas. This is highly important, but only a part of the problem. The other half is about price per megabit. Even in extremely densely populated areas, the price per megabit is way behind other 1st world countries.

It's pretty clear that if AT&T, Verizon or any other traditional DSL provider wants to remain relevant as a home ISP, they're going to need to start laying out FTTH.

They need fiber to the block, but that's exactly what U-Verse is, already. For the last mile, copper works just fine. Cable companies keep ramping up their speeds, keeping competitive with FIOS but over copper coax cables. Last-mile (or last 100m really), could be something cheap like Ethernet, giving 1000Mbps dirt cheap, and going up to 10GbE over the same copper lines very soon. Staying with phone lines, VHDSL can offer 52/16Mbps max, and who knows how much more the technology will advance DSL in the next decade?

It's even worse if you live in a rural area not covered by cable. Much, much worse. We have satellite. We get 10Mbps regularly, but live with a 25G monthly data cap, at $140/month.

I just signed up for internet at a rural site. $60/month for 1.5Mbs....they call me later to tell me that there will be a delay and that I am "lucky" because they are going to run fiber optics to my vacation home and I will get 4Mbs for that $60/month.

at some point I have to ask..why don't we treat power lines and communication lines as infrastructure and handle them like the road system? I know its not perfect, but its far more equitable of a situation than what we have now.

We busted up AT&T once to solve this problem..its time to try a different approach

It's even worse if you live in a rural area not covered by cable. Much, much worse. We have satellite. We get 10Mbps regularly, but live with a 25G monthly data cap, at $140/month.

I've had satellite internet as well. My family has 1.5Mbps with a 10G cap, which was exceeded more often than not. It was $80 bucks a month and if a bird flew in front of the dish, we lost internet access. Fortunately I figured out how to use my RAZR to get 3G internet access, which was more reliable and worked during heavy storms. Didn't use it all the time because we didn't have unlimited minutes...but we did on weekends. Hello Halo on PC!

It's pretty clear that if AT&T, Verizon or any other traditional DSL provider wants to remain relevant as a home ISP, they're going to need to start laying out FTTH. Or maybe the future will just rely on wireless for home Internet (with data caps, I seriously doubt that).

I don't think AT&T or Verizon is very concerned about being relevant as a home ISP. They have determined that they can get a better return on investment from mobile, so they have decided to focus on that. Their strategy for ISP seems to be to milk as much profit as they can with minimal investment.

There are 2 internet service providers that have contracts with the city I live in. One is Time Warner Cable (**spits on the ground**) the other is AT&T's DSL service. The recent move by AT&T to rebrand their DSL internet packages as U-Verse (a product name they used to reserve for their fiber properties) is absolutely pathetic. Since they had put so much energy in to promoting U-Verse for years with various marketing campaigns, people are under the mistaken impression that fiber is offered in their area. You can tell it's not any sort of fiber because they don't offer their U-Verse Television products in the area, only internet and home phone.

I had a friend in Burbank ask me if I've heard of this great deal AT&T has. I had to spell it all out for him because he had just looked at the price.

There are 2 internet service providers that have contracts with the city I live in. One is Time Warner Cable (**spits on the ground**) the other is AT&T's DSL service. The recent move by AT&T to rebrand their DSL internet packages as U-Verse (a product name they used to reserve for their fiber properties) is absolutely pathetic. Since they had put so much energy in to promoting U-Verse for years with various marketing campaigns, people are under the mistaken impression that fiber is offered in their area. You can tell it's not any sort of fiber because they don't offer their U-Verse Television products in the area, only internet and home phone.

I had a friend in Burbank ask me if I've heard of this great deal AT&T has. I had to spell it all out for him because he had just looked at the price.

If something is too good to be true...

I don't believe at&t offers Fiber to the House. U-Verse is their "Fiber to the Block" service (whatever a Block is), then DSL to the house.

Divide that fee with the number of months you'll use it, you get the point. Google 5mbit costs a 300USD contruction fee. It's dishonest to call that free.

Eh, maybe... the service itself is free, but like all Internet service, you can't use it without the right hardware. $300 is a lot of money, but maybe not so much when you consider that they're laying fiber-optic cable into your house. $300 divided by an infinite number of months is $0, and if you move into a house that already has the installation you probably don't have to pay the fee.

So yes, it's not free as in "you never have to pay any money ever," but then pretty much nothing is. The service, the processing of your data requests, etc., is provided without charge.

Basic math says that if you divide 300 with infinite months it'll just approach free, but never be free.

But all the same, let's be generous and say that you use your 5mbit line for 10 years, that'll come out at 1.60USD per month.

That's a good deal, but calling it's free is intellectually dishonest.

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As for the right hardware, I live in Denmark, and my ISP send me a free wireless router, and connected me to the internet, for /free/. As in, I paid nothing.